Correlation Between Sino Bioenergy and Energy Recovery
Can any of the company-specific risk be diversified away by investing in both Sino Bioenergy and Energy Recovery at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sino Bioenergy and Energy Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino Bioenergy Corp and Energy Recovery, you can compare the effects of market volatilities on Sino Bioenergy and Energy Recovery and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sino Bioenergy with a short position of Energy Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Bioenergy and Energy Recovery.
Diversification Opportunities for Sino Bioenergy and Energy Recovery
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sino and Energy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sino Bioenergy Corp and Energy Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Recovery and Sino Bioenergy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sino Bioenergy Corp are associated (or correlated) with Energy Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Recovery has no effect on the direction of Sino Bioenergy i.e., Sino Bioenergy and Energy Recovery go up and down completely randomly.
Pair Corralation between Sino Bioenergy and Energy Recovery
Given the investment horizon of 90 days Sino Bioenergy Corp is expected to generate 2.75 times more return on investment than Energy Recovery. However, Sino Bioenergy is 2.75 times more volatile than Energy Recovery. It trades about 0.04 of its potential returns per unit of risk. Energy Recovery is currently generating about -0.03 per unit of risk. If you would invest 0.21 in Sino Bioenergy Corp on January 19, 2024 and sell it today you would lose (0.13) from holding Sino Bioenergy Corp or give up 61.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Bioenergy Corp vs. Energy Recovery
Performance |
| Timeline |
| Sino Bioenergy Corp |
| Energy Recovery |
Sino Bioenergy and Energy Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Bioenergy and Energy Recovery
The main advantage of trading using opposite Sino Bioenergy and Energy Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Bioenergy position performs unexpectedly, Energy Recovery can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Energy Recovery will offset losses from the drop in Energy Recovery's long position.| Sino Bioenergy vs. Delta CleanTech | Sino Bioenergy vs. TOMI Environmental Solutions | Sino Bioenergy vs. Zurn Elkay Water | Sino Bioenergy vs. Purecycle Technologies Holdings |
| Energy Recovery vs. Federal Signal | Energy Recovery vs. 374Water Common Stock | Energy Recovery vs. CO2 Solutions |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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